Citation and Commencement
1. These Regulations may be cited as the Climate Change Agreements (Eligible Facilities) Regulations 2006 and shall come into force on 21st January 2006.

Interpretation
2. In these Regulations—
“eligible process” means a relevant process or activity or a combination of relevant processes or activities as described in the Schedule to these Regulations carried out at an installation or site which, when taken alone or together within the business sector to which the installation or site belongs, meets the energy intensity criteria specified in regulation 3;
“energy costs” means the actual cost of energy, including all taxes except deductible VAT, purchased or generated by the operator of the installation or site or by a business sector;
“import penetration ratio” means the value of imports as a percentage of the value of total sales in the United Kingdom (the latter to include the value of exports);
“installation” means any installation that is covered by paragraph 51 of Schedule 6 to the Finance Act 2000 by virtue of the Climate Change Agreements (Energy-intensive Installations) Regulations 2006;
Paragraph 51 was amended by S.I. 2001/1139 and S.I. 2006/59.
S.I. 2006/59 which expands the installations covered by paragraph 51 of Schedule 6 to the Finance Act 2000 so as include any installation falling within any one or more of the descriptions of installations specified in the Schedule to those Regulations.
“production value” means turnover, including subsidies, directly linked to the price of the product, plus or minus the changes in stock of finished products, work in progress and goods and services purchased for resale, minus the purchases of goods and services for resale;
“site” means a site on which there is an installation or part of an installation.

Eligible Facilities
3. (1) This regulation specifies the circumstances in which, for the purposes of determining in connection with concluding or varying a climate change agreement, an installation or site is to be or is to continue to be identified in a climate change agreement as a facility to which the agreement applies.
(2) An installation or a site shall be taken to be a facility for the purposes specified in paragraph (1) only if, at the time of entering into or last varying that climate change agreement—
(a) it is an “eligible facility” under the Climate Change Agreements (Eligible Facilities) Regulations 2001, and
S.I. 2001/662.
(b) the installation or site where taxable commodities supplied by taxable supplies are intended to be burned (or in the case of electricity, consumed) over the following 12 month period satisfies the conditions set out in paragraph (3).
(3) The conditions referred to in paragraph (2)(b) are that—
(a) the installation or site meets the energy intensity criteria, or
(b) the installation or site belongs to a business sector that meets the energy intensity criteria, and
the taxable commodities referred to in paragraph (2)(b) will be used at the installation or site for the purpose of carrying out an eligible process.
(4) For the purpose of paragraph (3)(a) and (b) the energy intensity criteria will be met where, for the period referred to in paragraph (2)(b), the predicted energy costs—
(a) amount to 10% or more of the production value of the installation or site or business sector, or
(b) amount to 3% or more but less than 10% of the production value of the installation or site or business sector so long as there is an import penetration ratio of at least 50%.
(5) For the purpose of paragraph (4), the predicted energy costs for the period referred to in paragraph (2)(b) shall be determined by the energy costs and production value and import penetration data for the installation or site or business sector during the 12 month period immediately prior to entering into or last varying a climate change agreement.
Elliot Morley
Minister of State
Department for Environment Food and Rural Affairs
18th January 2006